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tion to experts, to those persons who an explosion that wrecks the car does were familiar with the use of powder not make out a case of negligence in blasting, and that he was told by against the carrier sufficient to carry them that it was useless for any ex- to the jury the question of its liability plosive purposes, and that his action for his injury therefrom, by showing subsequently was governed by that." that, shortly before the car, which was The court considered that, without under perfect control, reached the that evidence, the jury would be point where the explosion occurred, a guided only by their own knowledge small package of dynamite had been in passing on the question submitted dropped from a dray which had passed to them by the trial court, to "con- that point, if the explosion occurred sider whether, under the circum- after dark, and there is nothing to stances, the extent to which the ex- show in what form the package preplosive nature of the compound had sented itself to the view of the motorbeen deteriorated by reason of wet and man, if it could be assumed that it had damp, and the ground which both dropped upon the track and caused the these parties had for believing it was explosion. not explosive, there was carelessness It may be noted that in Thompson and negligence on the part of [the v. Union Traction Co. (1918) 103 Kan. cartman] in the throwing it out of 104, 172 Pac. 990, it was held that a the cart into the street, or in carrying company which maintains an oil pipe it in such a manner that portions of on the surface of a highway, through it could be jolted out of the cart into which inflammable oil is flowing, is the street."

liable in damages to one who, without In Bigwood v. Boston & N. Street R. negligence on his part, breaks the Co. (1911) 209 Mass. 345, 35 L.R.A. pipe by driving a threshing outfit over (N.S.) 113, 95 N. E. 751, it was held it, and sustains injury and loss from that street-car passenger injured by the escaping oil, which catches fire.

B. B. B.

E. J. HUGHES et al.

V.
KAW INVESTMENT COMPANY.

Mississippi Supreme Court (In Banc) - July 2, 1923.

(- Miss. -, 97 So. 465.) Mortgage — default in payment of tax — when occurs.

1. Where lands are advertised for sale by the sheriff because of nonpayment of taxes, and the taxes are duly paid before the day of sale by the landowner, he is not in default as mortgagor, and his lands may not be sold under the following provision of the deed of trust: "Or should default be made in the payment of the taxes legally assessed against any of the hereinafter described property as due, then in any of said events the entire sum hereby secured with accrued interest then remaining unpaid shall immediately become due and payable at the option and election of the mortgagee herein, his heirs or assigns."

[See note on this question beginning on page 731.] Bills and notes negotiability trust on lands is payable to order, and

indorsement without recourse. indorsed by the payee as follows: 2. Where a note secured by deed of "Pay to the order of John Smith withHeadnotes by SYKES, P. J.

out recourse,"—this note is a nego- ($ 2795, Code of 1905), which protiable instrument.

vides for the notation on the records [See 3 R. C. L. 996.]

of assignments of any indebtedness, Assignment — notation - applicabil

does not apply to a negotiable instruity of statute. 3. Section 2296, Hemingway's Code

ment.
(Cook and Ethridge, JJ., dissent in part.)

CROSS APPEALS from a decree of the Chancery Court for Hinds County (Stricker, Ch.) in favor of defendants in an action brought to enjoin the sale of certain lands under a deed of trust, plaintiffs appealing from so much of the decree as denied them the 10 per cent statutory penalty, and defendants appealing from so much as enjoined them from selling a certain farm for nonpayment of taxes for the year 1920. Affirmed.

The facts are stated in the opinion of the court.
Mr. W. E. Morse, for plaintiffs: debtedness has exercised an option,

The Kaw Company is fraudulently granted him by the contract, of deattempting to prevent the purposes of claring the entire debt due should the the deed of trust.

mortgagor fail to pay the taxes. 5 C. J. 597; Finance Co. v. Ander- 13 C. J. 524, 541; Sharpley v. Plant, son, 106 Iowa, 429, 76 N. W. 748; 79 Miss. 175, 89 Am. St. Rep. 588, 28 Schroeder v. St. Louis Transit Co. So. 799; Parker v. Olliver, supra. 111 Mo. App. 67, 85 S. W. 968; Colt v. The assignment statute has no apHubbard, 33 Conn, 281; 19 C. J. 818; plication to the facts in the case at Swanson v. Spencer, 177 Mo. App. 124, bar. 163 S. W. 285; United States v. State 17 R. C. L. 849; Castner v. Walrod, Bank, 6 Pet. 29, 8 L. ed. 308; Heller 83 Ill. 171, 25 Am. Rep. 369; Slater v. v. Neeves, 83 Wis. 637, 67 N. W. 923, Cave, 3 Ohio St. 80; 26 Am. & Eng. 68 N. W. 412; Williams v. Townsend, Enc. Law, 2d ed. 739. 31 N. Y. 411; Osborn v. Rogers, 49 Hun, 245, 1 N. Y. Supp. 623; Union

Sykes, P. J., delivered the opinion Trust Co. v. Grant, 148 Mich. 501, 111

of the court: N. W. 1039; Germania L. Ins. Co. v. The appellants by their bill seek Potter, 124 App. Div. 814, 109 N. Y. to enjoin the sale of certain lands Supp. 435; Fleming v. Franing, 22 under a deed of trust. The default Okla. 644, 22 L.R.A. (N.S.) 360, 132 Am. declared in the advertisement of sale St. Rep. 658, 98 Pac. 961; Security was that default had been made in Loan Asso. v. Lake, 69 Ala. 465.

the payment of taxes. The clause The Kaw Investment Company is indebted to the complainants in the

relating thereto in the deed of trust sum of 10 per cent of the principal and

is as follows: “Or should default interest.

be made in the payment of the taxes State use of Lafayette County v. legally assessed against any of the Hall, 70 Miss. 678, 13 So. 39; State v. hereinafter described property as Marshall, 100 Miss. 626, 56 So. 793, due, then in any of said events the Ann. Cas. 1914A, 434; Holmes v. Mc

entire sum hereby secured with acGinty, 44 Miss. 94; Powell v. McKee,

crued interest then remaining un81 Miss. 229, 32 So. 919.

paid shall immediately become due Messrs. Teat & Potter and D. R. Hite, for defendant:

and payable at the option and elecUnder the terms of the deed of trust tion of the mortgagee herein, his plaintiffs were in default, and the de- heirs or assigns.” fendant was entitled to declare the The taxes had not been paid by entire debt due.

the appellants before the time came, Parker v. Olliver, 106 Ala. 549, 13

and the lands were advertised for So. 40; Stevens v. Cohen, 170 Mass.

sale by the sheriff for nonpayment 51, 49 N. E. 926. Equity will not enjoin a foreclosure

thereof. The sale was to be made in violation of the contract of the

April 1. When this fact was ascerparties, where the holder of the in- tained by the owners of the notes,

course.

fault in payment of tar when occurs.

(- Mi88 - 97 So. 465.) sometime in March, they advertised forfeit to the debtor ten per cent of this land for sale under the deed of the amount of said indebtedness.” trust. Shortly thereafter, and be- The question here presented is fore the day of sale, the appellants whether or not this paid the taxes.

statute applies to Bills and notes The question here presented is the indorsement of Indorsement

without rewhether or not, under the clause of a negotiable instruthe deed of trust above quoted, the ment. It was passed appellees had a right to declare a when our anticommercial statute forfeiture and sell the lands. Tech- was in full flower. Under that statnically speaking, taxes are due De- ute all notes were non-negotiable, cember 15. If not paid by February except those payable to bearer; con1, a penalty accrues. The taxpayer, sequently, a negotiable instrument however, has the right to pay the

was not within the terms of the stattaxes at any time before the land is ute. There is a difference between sold. This clause is a penal one, and

"assignment" and "indorsement.” must be strictly construed against Indorsements of negotiable instruthe creditor, and liberally construed ments are of various kinds, as esin favor of the debtor. Since the pecially pointed out in our Negotidebtor has the right to pay these able Instrument Acts. A note made

taxes at any time payable to order and indorsed in Mortgage-debefore the lands are

blank thereafter passes by delivery. sold, a forfeiture

If this statute were applicable to under this clause of negotiable instruments, it would dethe deed of trust cannot be declared,

pend upon the nature of the indorseat least, until the day of the sale of

ment as to whether the penalty apthe land. The chancellor so held up

plied. If the note were indorsed in on this question.

blank, neither the taker from the The note in this case was payable

indorser, nor any other taker, could to the order of S. E. Cobb, and was

be liable under the statute, for the indorsed as follows:

reason that it was not specifically

eo nomine made payable to him. On "Pay to the Kaw Investment Com- the other hand, if it were made paypany without recourse.

able to one by name, as in this case, “[Signed] S. E. Cobb." the statute would apply. In other

words, the nature of the indorseThis indorsement was not noted

ment, under that theory, would deon the record of Hinds county with

termine the liability of the indorsee in thirty days from its execution. It

to the penalty. This is not the law. is contended by the appellants that, While the word “assignment” is a under $ 2296 of Hemingway's Code broader term than the word "in($ 2795, Code 1906), because of this dorsement,” and sometimes includes failure, the owners of the notes for- it, this section was dealing solefeited to the mortgagors 10 per cent ly with non-negotiable instruments, of this indebtedness. This section and the assignment therein referred reads as follows: "All assignments to was the assignment necessary to in whole or in part of any indebted- non-negotiable instruments, and not ness secured by mortgage, deed of

the indorsement of a negotiable intrust, or other lien of record, shall strument. be entered on the margin of the rec

“Assignment is a broader term ord of the lien within thirty days

than 'indorsement,' and is more comfrom the day of said assignment, or prehensive than the term 'indorse,' said assignment shall be acknowl- 'negotiate,' or other like words, as edged and filed for record within applied to commercial paper. Assaid time, and if the assignee of said signment is generally used to signify indebtedness fail to comply with the the transfer of non-negotiable inprovisions of this section he shall struments, while 'indorsement is

ute.

used to signify a transfer of negoti- same as to subsequent creditors and able instruments.” 5 C. J. p. 841. purchasers for value without notice,

The use of the word "assignment” unless the assignment be by writing in this statute referred only to non- duly acknowledged and filed for recnegotiable instruments, and was not

nd was not ord; and every assignment by an asmeant to, and does not, include the signee of any such lien shall be envarious indorsements of negotiable tered in like manner and with like instruments. The Chancellor held effect in case of failure.” that the indorsees

Section 2306, Hemingway's Code Assignmentnotation-appli

of the note were not (chap. 196, Laws 1910), among othcability of stat. liable to this pen- er things, provides: "But the clerk

alty. This is also a shall not record any mortgage or penal statute, and must be strictly deed of trust in which the name of construed.

the beneficiary is not disclosed thereThe decree of the lower court is in; and if such instrument is reaffirmed.

corded, it shall not impart notice to Cook, J., dissents in part.

anyone; provided, the failure to dis

close the name of the beneficiary Ethridge, J., dissenting in part:

shall not apply to mortgages and I dissent from that part of the

deeds of trust given by corporations opinion which holds that $ 2296,

either foreign or domestic, to secure Hemingway's Code ($ 2795, Code

the payment of serial bonds payable 1906), is not applicable to deeds of

to bearer; and the assignment or trust securing negotiable instru

transfer of such mortgages or deeds ments. Section 2296, Hemingway's of trust or bonds secured by the Code ($ 2795, Code of 1906), is set

same need not be entered on the out in the majority opinion, but it

margin of the record. But it shall ought to be construed in connection with $ 2295, Hemingway's Code (§ securities covered by this proviso to

be the duty of the holder of such 2794, °Code of 1906), and with list and assess the same for taxation, 2306, Hemingway's Code ($ 2805,

if liable for taxation, in the hands Code 1906), and chapter 196, Laws

of the holder, such list or assessment of 1910, amending § 2805, Code of 1906, and the meaning and purpose

to show the amount, date, date due

and value of such securities of such of the legislative scheme determined from a reacing of all these sections corporation so made payable to beartogether. In other words, $ 2296,

er, and on failure of the holder to

so assess the same, all interest thereHemingway's Code ($ 2795, Code

on shall be forfeited in his hands 1906), does not stand alone, and a

and as against him, and he shall be construction which might be reason

denied the right to recover such inable if it stood alone may not be

terest in the courts of the state." reasonable when considered with other sections in pari materia.

The original section of the Code Section 2295, Hemingway's Code

of 1906 (2805) ended as follows: (§ 2794, Code 1906), reads as fol

“But said clerk shall not record any lows: "When the indebtedness, or

mortgage or deed of trust in which any part thereof, secured by a mort

the name of the beneficiary is not gage, deed of trust, or other lien of

disclosed therein, and if such instrurecord shall be assigned by the per

ment is recorded it shall not impart son appearing by the record to be notice to anyone." the creditor, he shall be required by The legislative policy is clearly inthe assignee to enter the fact of the dicated in the last sections, and esassignment on the margin of the rec- pecially by chapter 196, Laws of ord of the lien; and in default of 1910 (2306, Hemingway's Code), making such entry, any satisfaction which makes its own exceptions by or cancelation of the lien or instru- providing that the failure to disclose ment evidencing it entered by the the name of the beneficiary shall not original creditor shall release the apply to mortgages and deeds of (- Mi88. , 97 So. 465.) trust given by corporations, either have such debt listed for taxation. foreign or domestic, to secure the It may be that the instrument which payment of serial bonds payable to is secured by the mortgage is a bearer. This is plainly a legislative negotiable instrument, and under declaration that the section shall ap- our law the security passes with the ply to all deeds of trust and mort- transfer of the debt; but people are gages not excepted from the opera- supposed to make their contracts in tion of the section, under the rule view of the law, and, if it is desired that, where the legislature enumer- that a note should be negotiable and ated the things to be excepted, the pass from hand to hand by delivery, enumeration embraces all that is in- that purpose could be carried out by tended to be excepted, and all other either not taking the security, or not classes are included. These sections placing it of record, taking the condeal with the record of instruments, sequences, in either case, that would and have no bearing on the negoti- follow such action. The state has ability or non-negotiability of in- full power to deal with the record of struments. The statutes probably instruments, and to provide such intend to serve several purposes, one conditions as it may deem best for of which was to enable the debtor to the public interest. In my humble know who his creditor was, so that opinion, the decision in the present he might deal with his obligation in case emasculates the statute, and dethe light of such information, and feats the purpose indicated by the the suit before us demonstrates the legislature. The statute may not be benefit of having such knowledge, a wise one, and may be in fact subbecause the maturity of all the debt versive of the public welfare, but is attempted to be accelerated in the

that is a question with which the case before us, without any notice to

court has no kind of concern, bethe debtor, in advance, of the accel

cause the shaping of public policy eration. The sections also intend to

and the making of laws is for the give information to the taxing au

legislative department. thorities as to who is the owner of the recorded debt, so that the state, Suggestion of error overruled counties, and municipalities may September 24, 1923.

ANNOTATION.

Time within which taxes may be paid to prevent operation of acceleration

clause in mortgage.

a

Time at which taxes are delinquent.

Decisions on the question under annotation involve cases where clause in the mortgage provides that, upon default in the payment by the mortgagor of legally assessed taxes or assessments on the mortgaged property, the debt secured by the mortgage shall immediately become due and payable, if the mortgagee so elects.

The courts in general hold that where there is a provision for the acceleration of the mortgage for failure of the mortgagor to pay taxes on the mortgaged premises, the mortgagee's right to declare the entire debt due matures as soon as the taxes become delinquent, and a foreclosure action

thereafter instituted is not commenced prematurely. Parker v. Olliver (1894) 106 Ala. 549, 18 So. 40; Hume v. Indiana Nat. L. Ins. Co. (1922) 155 Ark. 466, 245 S. W. 19; Buffalo Center Land & Invest. Co. v. Swigart (1916) 176 Iowa, 422, 156 N. W. 422; Elwood v. Wolcott (1884) 32 Kan. 526, 4 Pac. 1056; Condon v. Maynard (1889) 71 Md. 601, 18 Atl. 951; National L. Ins. Co. v. Butler (1901) 61 Neb. 449, 87 Am. St. Rep. 462, 85 N. W. 437; Farmers Security Bank v. Martin (1915) 29 N. D. 269, L.R.A.1916D, 432, 150 N. W. 572.

But in the reported case (HUGHES V. KAW INVEST. Co. ante, 727) it is held that, since the mortgagor has the

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